- Long steel prices may remain largely stable amid subdued demand
- HRC prices to stay stable amid weak seasonal demand, cost support
Below is the brief near-term outlook for five key steel products Mysteel shares on a weekly basis, drawing upon the results of related surveys and communication with Chinese market participants.
Rebar & wire rod: China’s prices of the two major long steel items are expected to be range-bound over 17-21 August, with both demand and supply in the domestic market staying around recent lows.
Negative profit margins from long steel sales are likely to extend maintenance stoppages among some steelmakers to late August. However, actual downstream demand may remain subdued in the short run as persistent high temperatures and rainy weather across many parts of China continue to constrain outdoor construction activity, posing downward pressure on prices of steel longs.
Hot-rolled coil: Chinese HRC prices are projected to stay around recent levels this week despite firmer cost-side support, mainly as seasonal low consumption of this flat steel from downstream manufacturing sectors remains a drag. While the latest recovery in the futures market has temporarily lifted market mood, most traders and end-users are expected to stay cautious in making procurements in the spot market.
Cold-rolled coil: CRC prices are likely to remain largely stable over the week ending 21 August. Although market sentiment was slightly lifted by recovering futures prices last week, this failed to translate into an uptick in spot transactions as most end-users still purchased stocks only on a need-to basis. This would also keep most buyers on the sidelines this week as actual CRC consumption shows no clear signs of recovering in the near term.
Medium plate: Medium plate prices are expected to rise slightly over 17-21 August. Medium plate stocks held by both steelmakers and traders trended downwards last week, signaling a potential uptick in downstream demand, which will restore market confidence and lend some support to the price of this flat steel item.
Medium plate inventories held by traders in the 65 Chinese cities under Mysteel’s tracking totaled 2.51 million tonnes (mnt) as of 13 August, down by 1.1% or 26,900 tonnes (t) on week and marking the end of a three-week accumulation.
Sections: Steel section prices are likely to post small drops over 17-21 August. Market fundamentals for steel sections are likely to weaken this week as some re-rollers plan to resume operations following last week’s modest price recovery. But on the demand front, tight project cash flows and persistent summer heat will continue to slow construction progress and dampen end-users’ replenishing interest. As such, most traders remain pessimistic about the near-term market, and many are offering discounts to facilitate sales.
Note: This article has been published in accordance with a content exchange agreement between Mysteel Global and BigMint.
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